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| Greek Prime Minister Alexis Tsipras, left, shakes hands with Donald Tusk, president of the European Council. Euro zone leaders reached a unanimous agreement to move forward with a bailout loan for Greece, Tusk said on Monday. Credit: Associated Press |
If your head is spinning, either because you’ve just woken up to find the talks are still going, or because you have been up all night following the talks, the NY Times and The Guardian are reporting a tentative agreement has been reached.
NY TIMES
European leaders said Monday morning that they had reached a deal meant to resolve Greece’s debt crisis and avert a historic fracture in the Continent’s common currency project. German Prime Minister Angela Merkel said thr threat of Grexit is off the table, even though a new bailout hasn’t been agreed yet (and that’s an important point).
Merkel says she can recommend “with full conviction” that the Bundestag should agree to open negotiations with Greece. But the Greek parliament must approve the entire conditions before the German parliament votes.
Donald Tusk, the president of the European Council, wrote on his Twitter account shortly before 9 a.m. on Monday [that] The new bailout for Greece would involve “serious reforms & financial support,”
The agreement, whose details have not yet been described, aims to provide Greece with its third bailout package in five years. The tough terms, demanded by Germany and others, are meant to balance Greece’s demands for a loan repayment system that will not keep it mired in recession and austerity budgets, against creditors’ insistence that loans worth tens of billions of euros would not be money wasted.
Any agreement in principle would still need to be fleshed out and to receive further approvals before new European aid flows to Greece. Greek banks, closed for the last two weeks, might still not be ready to open. But an accord would end five months of bitter negotiations that raised concerns that Greece would be the first country to be forced out of the euro currency union – a development that proponents of European unity had sought desperately to avoid.
During the marathon negotiation session, Alexis Tsipras, the Greek prime minister, struggled with economic overhauls demanded by the creditors but which his left-wing government will find difficult to sell at home — just a week after Greek voters overwhelmingly rejected softer terms in a referendum.
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| Chancellor Angela Merkel of Germany, President François Hollande of France and Prime Minister Alexis Tsipras of Greece before the meeting of eurozone leaders on Sunday. Credit John Macdougall/Agence France-Presse — Getty Images |
THE GUARDIAN
Prior to reports of the above agreement, Ian Traynor and Jennifer Rankin write:
A weekend of high tension that threatened to break Europe in two climaxed on Sunday at a summit of eurozone leaders in Brussels where the German chancellor, Angela Merkel, and the French president, François Hollande, presented Tsipras with an ultimatum.
The ultimatum - debated over more than 15 hours - entailed a series of draconian measures as the price of avoiding financial collapse and being ejected from the single currency bloc.
The severity of the eurozone terms being applied to a country on its last legs shocked Greeks.
It remained to be seen how Tsipras would be received when he returned home from the climactic negotiations of the five-year debt crisis.
Social media sites throbbed with outrage. The hashtag #ThisIsACoup soared to the most trending in Europe, in Greece but also in Germany where Der Spiegel described Berlin’s demands of Athens as a “catalogue of horrors”, and to the second-highest trending worldwide.
In what a senior EU official described as an “exercise in extensive mental waterboarding” to secure Greek acquiescence to talks on a third bailout in five years worth up to €86bn (£62bn), Merkel and Hollande had pressed for absolute certainty from Tsipras that he would honour what was on offer.
Under the terms set before Tsipras, the Greek parliament has to endorse the entire package and then pass several pieces of legislation by Wednesday, including on pensions reform and a new VAT regime, before the eurozone will agree to negotiate a new three-year rescue package.
The terms are much stiffer than those imposed by the creditors over the past five years. This, said the senior official, was payback for the emphatic no to the creditors’ terms delivered by the snap referendum that Tsipras staged a week ago. “He was warned a yes vote would get better terms, that a no vote would be much harder,” said the senior official.
The Eurogroup document said experts from the troika of creditors – the IMF, European Commission and European Central Bank – would be on the ground in Athens to monitor the proposed bailout programme.
While Greece’s fate was being debated in Brussels, in Athens the ruling leftwing Syriza party was showing signs of disintegration. Demands that the reforms be approved by the Greek government and put into law by Wednesday were described as “utter blackmail” by leading party members and met with disbelief.
Although sources close to Tsipras said the leader was determined to do whatever was needed to keep Grexit at bay, political tumult also beckoned. Insiders conceded that a cabinet reshuffle – removing ministers who had refused to vote the austerity package through parliament early on Saturday – could come as early as Monday.
By late Sunday night it had become clear that Tsipras’s U-turn on measures he had once spurned had produced a potentially far-reaching split. In addition to 17 MPs breaking ranks at the weekend – stripping his government of a working majority – 15 other lawmakers also indicated they would not approve the agreement in its entirety. The resistance raises the spectre of Tsipras being forced to call fresh elections – a move described as potentially catastrophic for the country.
Although billed as the last chance to secure “the ultimate agreement” on the Greek debt crisis, the prospects of a grand political bargain to keep Greece in the eurozone are far from assured.